Published: 05:27 BST, 23 August 2026 | Updated: 05:27 BST, 23 August 2026
Labor’s Special Envoy for Housing Josh Burns was unable to explain Treasury’s modelling, which predicted the government’s housing tax changes would increase rents by $2 a week, as economists warn the reforms could add pressure to tenants.
In a News24 interview with Andrew Clennell on Sunday, Burns repeatedly dodged questions about how Treasury calculated the $2 figure mentioned in the May budget.
The reforms include the removal of negative gearing for existing homes and the end of the 50 per cent capital gains tax discount, replacing it with a 30 per cent flat tax indexed to inflation.
Economists and property industry groups have warned the changes could discourage investment in existing properties, reduce the supply of rental homes and push rents higher.
Concerns intensified after NAB economists published analysis suggesting rents in Sydney and Melbourne could rise by 25 to 30 per cent if investors demand higher rental yields to make up for the loss of tax advantages.
'In our view, the changes to the tax settings for investors in existing dwellings imply that gross rental yields will need to rise in order to compensate for the loss of tax benefits,' NAB head of Australian economics Gareth Spence said.
'For investment properties in Sydney and Melbourne, a rise in the rental yield of 1 percentage point from about 3.5 per cent to around 4.5 per cent implies an increase in rents of 25 to 30 per cent, assuming the current level of house prices is unchanged.'
NAB later clarified the analysis did not account for the large number of existing investment properties that will be grandfathered under current negative gearing arrangements.
Josh Burns (pictured) said he could not explain Treasury's $2 a week rent increase estimate
The interview became tense when Clennell pressed Treasury's own estimate that the tax changes would only raise rents by $2 a week
The interview became tense when Clennell pressed Treasury's own estimate that the tax changes would only raise rents by $2 a week.
PropTrack data showed national asking rents rose 3.1 per cent in the June quarter alone, equal to about $21 a week for a typical rental property.
'How did they come to that conclusion?' Clennell asked.
'What is that based on, or was it plucked out of the air?'
